Across Europe and Asia, legislative updates and new laws coming in 2020 will impact how HR professionals across all regions hire, onboard, and support their employees.
To help HR teams stay ahead of these regulatory changes, Velocity Global partnered with SHRM for a webinar that breaks down legislative updates in 10 key international markets. These featured markets are the most promising countries for tech firms going global, identified in Velocity Global’s The State of Global Expansion Report 2019: Technology Industry’s Tech Index.
The webinar, led by Max Bramer, Operations Chief of Staff at Velocity Global, covered everything from taxes to employment contracts, salary requirements to immigration—and the drastic changes that will impact specific markets.
Read on for the overview of legislative updates covered in the five top markets:
Market #1: The Netherlands
Bramer began the webinar with an important employment law change coming to the Netherlands in 2020: The Labor Market in Balance Act. This Act amends many employment rules, including:
- Maximum probation periods for permanent employment contracts
- Extended grounds for termination, expanded from the current statutory eight months to 10
- New timeframes for employees’ transitional payments for employees between jobs
Bramer noted that, while there are multiple changes, the Dutch government designed the Act to incentivize employers to hire permanent employees. Permanent employment is a crucial component of successful global expansion plans and ensures that employers avoid independent contractor risks in the Netherlands.
Market #2: Denmark
Next, Bramer discussed forthcoming changes to Denmark’s Holiday Act. Under the current legislation, employees must wait up to 16 months before accruing holiday entitlement. Under the amendment, employees accrue holiday entitlement within their first month of employment and have greater flexibility to use the time off throughout the following 16 months.
The calendar year spans from September 1 to August 31, but employees can use that calendar year’s holiday entitlement into December of the same year. Danish lawmakers included a transitional provision to help employers contend with changes and honor those who accrued time off before implementing the Act.
Market #3: Singapore
January 1, 2020, marks the start of Singapore’s updated Goods and Services Tax (GST) Act. Companies without in-house or in-country employees supplying certain services must pay tax on the following imports:
- IT services
- Marketing services
- Accounting services
- Music and video streaming
- Subscription fees
- Applications
Bramer explained that the new tax applies only to services subject to standard, in-country GST. The new provisions do not apply to most financial transactions, meaning businesses will likely not pay any additional fees on overseas transactions.
Market #4: Ireland
Bramer then noted that Ireland, the country with Europe’s highest GDP growth rate, is amending its salary requirements for Critical Skills Employment Permit-required roles. These changes do not impact current employment permit holders, General Employment Permits, or Intra-Company Transfer Employment Permits.
However, some General Permit applications now require a Labor Market Test under the new amendment. Businesses must advertise vacant roles on the Department of Employment Affairs and Social protection’s website for 28 days—doubling the length of the previously required test. Employers need to factor in this extension, as well as the salary increases for their 2020 budget.
Market #5: Sweden
While Ireland’s amendments affect new employees, Bramer highlighted that Sweden’s Employment Protection Act updates ensure aging employees are secure in the years leading up to their retirement.
The Act’s current measures protect employees from termination without just cause until age 67. Beginning January 1, 2020, the Act’s updates extend employment protections to employees age 68, and extends to employees age 69 beginning in January 2023. Once employees reach these ages, employers can terminate workers without just cause.
Ensure You Hire and Support Employees Compliantly with an Experienced Partner
Bramer concluded the webinar by covering five additional top markets’ forthcoming employment law changes: Switzerland, Germany, Finland, Korea, and the United Kingdom. He also stressed that it is essential for firms to understand these fundamental changes before finalizing 2020 global expansion strategies. Companies must ensure their teams are educated on these critical employment law updates or face severe fines and penalties.
If you couldn’t make it to the webinar or would like to revisit some of the legislative changes, click here to watch it in full.
